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Hargreaves Lansdown delays launch of new pricing structure

Nick Paler
Written By:
Nick Paler
Posted:
Updated:
02/10/2013

Hargreaves Lansdown – the largest consumer-facing platform in the UK – has pushed back the launch of its new pricing structure.

Your Money’s sister title Investment Week can exclusively reveal the direct to consumer platform giant is now planning to launch its new pricing structure, which includes a switch to ‘super clean’ pricing on funds, at the start of February.

Hargreaves had previously said it was aiming for an early January launch for its rebate-free charging structure, but said it wanted to give customers an extra month to prepare for the changes.

The Financial Conduct Authority (FCA) has banned online fund platforms, such as those run by Hargreaves, from receiving commission ‘rebates’ from fund managers from next April.

Ian Gorham, chief executive of Hargreaves, told Investment Week the group wanted to see what rivals came out with first before making a move in terms of its platform pricing.

“We have pushed it back because we do not feel under any pressure to launch it beforehand, and it lets us see what rivals are coming out with,” he said.

He said there was no issue with fund groups stalling over super clean pricing, stating discussions had now been “concluded”.

Gorham (pictured) said the platform – which previously put a tender out to fund groups asking them to “put their best foot forward” in terms of super clean – was now sorting through the pricing offers, with the research team matching proposed super clean prices with fund performance to determine its new look Wealth 150 of preferred funds, as well as its brand new core list of around 30 funds.

“We have all the information now, including what charges are proposed,” he said.

Under the new charging structure all clients will get the same deals, with existing clients getting higher loyalty bonuses where super clean pricing is negotiated to ensure they are on the same terms as any new clients.

Gorham said the platform wanted to avoid having “legacy” clients and new clients, preferring to treat them all as ongoing clients.

He also revealed some fund groups were still considering using rebates but said since most of its clients’ assets were wrapped, any rebate tax implications were minimal.

Details of the new charging structure will be released at the end of November, with the new look Wealth 150 and core funds lists also likely to be published at the same time.

Hargreaves has already said it is opting for a tiered charging structure, with the platform fee a percentage of a client’s assets under management.

Clients will then have two months to prepare for the change in the way they pay for funds via Hargreaves.